January 22, 2021

The Government approves new aid to consumers to fight against energy poverty | Economy

The Government approves new aid to consumers to fight against energy poverty | Economy


The Minister for the Ecological Transition, Teresa Ribera, on September 26.

The Council of Ministers approved on Friday the energy law decree that, among other measures, annuls the tax of 7% on electricity generation and hydrocarbon tax for six months, time that is given to develop a National Strategy against Energy Poverty . A total impact of 7% is calculated downwards in the receipt of the light. In addition, it introduces changes in the electric social bond, creates the thermal social bond for heating and suppresses the sun tax.

The Ministry for the Ecological Transition plans to discuss with the social sectors the National Strategy against Energy Poverty to enact it within a period of six months from the publication of the decree law (that is, until the beginning of April). This strategy will establish measures and actions to reduce and alleviate this problem that affects more than 4.6 million people, according to the minister, Teresa Ribera. The objective is to facilitate the energy transition, restore confidence to attract investment and build a stable market.

The restructuring that the Government intends is based on five main pillars: energy poverty, consumer protection, self-consumption, promotion of renewable energies and taxation and sustainability of the system. According to the minister, "while there is no substantive structural reform, it will not be possible to modernize the economy, nor to provide coverage to those who suffer from energy poverty". He also stressed that a reasonable return for investors will be sought, but avoiding making the transition more expensive.

ENERGY POVERTY IN HOUSEHOLDS

Percentage of families that can not afford to keep the house with an adequate temperature.

Source: INE.

The most immediate measure is the suppression of the electricity generation tax that was established by the previous government and the hydrocarbon tax that is applied in the generation of gas, known as "green cent." It is about addressing the controversy of the formation of the receipt of light. At present, 50% comes from the cost of financing infrastructures, tolls and other factors unrelated to the business and 22% of taxes, leaving only 28% corresponding to consumption.

The ministry estimates that the suspension of both taxes will have an impact of 7% on the receipt of electricity. 4% corresponds to electricity generation and 3% to green cent. The reduction of this tax has an effect on the wholesale electricity market (where the bids for the purchase of energy between companies are married), since it is the gas and coal plants that usually mark the marginal price that is charged for all the sources. What must be decided is if, after six months, the taxes are eliminated altogether, modified or recovered.

According to market calculations, the annulment of the generation tax represents a saving of around six euros in the receipt for an average household with consumption of 2,600 kilowatts / hour and about eight for one with more contracted power. The reduction of income for the State is estimated at around 1,000 million.

Social bonds

The measures on the current social bond (created in 2017 by the Government of the PP that replaced the previous model, annulled by the Supreme) will expand the beneficiary social groups. In this way, they enter as single-parent families (or, as Ribera said "monomarentales", since 85% of families with only one head are women), whose maximum income threshold to access will increase by 0.5 times the IPREM with respect to families with two parents, and people in situations of dependency. In that sense, it will be prohibited to cut off the supply in households with at least one child under 16 years of age or where at least one person with a disability level of 33% resides. These circumstances, which must be accredited with certificates issued by social services, were not contemplated in the previous regulation.

At the same time, a new social thermal bond is created, which includes heating fuels (natural gas, butane gas, diesel, pellets …). All persons entitled to the electric social bond shall be entitled to it automatically. They are, therefore, cumulative, and the way to reach the thermal is to be recognized as beneficiary of the electric. The amount of this aid will depend on the amount that is allocated each year in the State Budgets and the number of beneficiaries of the electric social bond at December 31. Its amount will depend on the condition of severe vulnerable or vulnerable consumer and the climatic zone where the beneficiary lives.

Prohibition of door-to-door contracting

The government has also banned the door-to-door contracting of energy supply, one of the great demands of consumer associations, and something also claimed by the Commission of Markets and Competition (CNMC). The minister for the Ecological Transition, Teresa Ribera, mentioned this action as one of the key points of the decree law that aims to protect a consumer many times defenseless against a service that half of users confess not to understand.

More term for renewable

The Government has extended the period of processing permits for the construction of the 9,000 megawatts of renewable energy committed until March 30, 2020. The term until now was December 31, 2018 and only permits for 80 megawatts had been requested for some plants that should be working by 2020, so an extension was necessary.

As for the social bonus, follows October 8 as the maximum term for beneficiaries and families in their 2009 configuration to request in their reference distribution company to pass to regulated in 2017, although it will be flexible and will allow de facto to be request until December 31 of this year. For those who have not recognized the social bonus, there is a deadline for them to request it.

The CNMC repeatedly denounced the bad practices of some commercials in attracting customers at home. Less than a month ago, it obliged the electricity companies that operate in both the free and regulated markets to change the brands of their subsidiaries so as not to confuse consumers within a period of six months.

"The electricity bill should stop being that great unknown," Ribera said on Friday at the press conference after the Council of Ministers, which detailed the general lines of the new decree law. The minister, who had already crossed out the receipt of "incomprehensible", explained that the bill will include clearer information so that users understand what they pay and how they can benefit from a tariff of hourly discrimination, with which it is cheaper to consume at night and first thing in the morning and they have only contracted 660,000 of the 11.1 million consumers who take advantage of regulated prices.

On the other hand, the new decree provides that users with an intelligent meter can contract the power – it allows access to the supply even if it is not used – in multiples of 0.1 kilowatts (kW) instead of multiples of 1.1. In this way, the consumer can adjust the power he needs more precisely and achieve savings on the receipt. Each kilowatt corresponds to about 40 euros per year for consumers under the regulated tariff, the Voluntary Price for Small Consumers or PVPC.

Ribera also addressed another key issue in the development of self-consumption in Spain: the sun tax. The minister announced the elimination of this tax, which he defined as "a great absurdity", the simplification of bureaucratic obstacles and the recognition of the right to self-consumption shared by one or several consumers, in line with the policies being promoted by the EU in its design towards a cleaner energy model.

"Timid" measures

A. M. / L. D. F. / M. Á. N.

Unidos Podemos, a parliamentary partner of the Government with which it negotiates the General Budgets against the clock to have a draft before October 15 (date to present them in Brussels) considers that the improvement measures in the social bonus are still "timid". The training considers that more citizens in a situation of energy poverty should be included, which is why negotiations on this issue are not concluded. Sources of the training consider that the Government's calculation of a 4% drop in the bill is not enough. Neither do they value positively the decision to reduce taxes on electricity companies because it will reduce the State's collection. They propose to modify "those benefits fallen from the sky" that, they claim, even Competence qualifies as "over-compensation" to these companies. We can continue to press to improve this initiative in the working table with the Executive. For the moment, he celebrates the repeal of the sun tax, which he believes has improved thanks to the demands of his training.

Also Facua and the Organization of Consumers and Users (OCU) consider that the Government has fallen short with the measures adopted this Friday regarding the social bonus. On the other hand, OCU applauds the elimination of the sun tax, the prohibition of contracting door to door and the implementation of a social thermal bond, one of its old claims.

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